If you are under a federally-regulated health plan, twelve months is the longest period of time that your plan can exclude coverage for your preexisting condition. (Ask your employer if you are not sure whether your plan is subject to the federal law.)

We also discussed the fact that Federal regulations prevent the denial of emergency medical services due to the lack of health insurance. However, as this NYTimes piece notes, you can't be compelled to provide emergency services that aren't offered. Many specialties avoid ER call because ER call makes them more likely to be sued for malpractice.

Tuesday, September 23, 2008

CNN has an article on the coming trend towards concierge medicine, or boutique medicine. The example given is for a $1,500 fee (annually?) for the doctor to reduce his practice from 2,500 patients to 600. With that the promise is for increased access. That's $900,000!! Those sneaky doctors may have just monetized the opportunity cost of sitting in a waiting room.

Monday, September 22, 2008

With obesity levels higher than in any other state except Mississippi, Alabama's insurance board chief William Ashmore and his staff of workplace wellness advocates decided it was time for a change.

"Over 10 percent of the people we screen are at risk for one of the factors we're screening for, and the vast majority had no earthly idea they were at risk," Ashmore said.

But the plan, which encourages state workers to have health screenings and to see a doctor if a problem is found, is angering some employees.

"It's penalizing people for being genetically who they are," says E-K. Daufin, a college professor at Alabama State University. "I have a lovely sexy body mass index of 44 right now," a number that would put Daufin in the group that would have to pay. That is, unless she decided to see a doctor about the issue.

I love the fact that E-K invokes the genetics defense. It brings up an important question: Are we liable for our genes? Are our parents responsible? Don't forget that genes are not exactly deterministic, environmental factors can turn them on and off.

Wednesday, September 17, 2008

How people spend their discretionary income – the cash that goes to clothing, electronics, recreation, household goods, alcohol – depends a lot on where they live. People in Greece spend almost 13 times more money on clothing as they do on electronics. People living in Japan spend more on recreation than they do on clothing, electronics and household goods combined. Americans spend a lot of money on everything.

Tuesday, September 16, 2008

Higher taxes are most likely in our future, regardless of who we elect:

Douglas Holtz-Eakin, a former Director of the Congressional Budget Office and current chief McCain economic advisor, is an honest man--which means he's something of a liability on the Straight Talk Express. A few months ago, he admitted to my colleague, Michael Scherer, that Barack Obama's economic plan would reduce taxes for most people. And now, in a forthcoming book by Fortune columnist Matt Miller, he makes it clear that the next President is going to have to raise taxes.

"If you do nothing on the spending side, you're going to have to raise taxes whether you're a Republican, a Democrat or a Martian," he tells Miller...and then he immediately makes it clear that the "spending side" part of the argument is nothing more than a political fig-leaf.

And the futures market is also betting on rising taxes according to Mankiw.

The top income tax rate is now 35 percent. According to the betting at Intrade, the probability that the top income tax rate in 2011 will exceed 38 percent is 0.87. Call this P(tax hike).

Barack Obama has made such a tax hike part of his campaign promises, and there is no reason to think the Congress won't deliver for him. So let's assume Obama is certain to get the tax hike if he wins. That is, P(tax hike / Obama) = 1.0. (If this assumption is wrong, and this conditional probability is less than one, then my conclusion below would be even stronger.)

According to Intrade, the probability of Obama being the next president is 0.53. Call this P(Obama). And P(McCain) = 0.47.

Now we can calculate the probability of a tax hike conditional on McCain winning. It comes from the formula

Sunday, September 14, 2008

I was asked to participated in a Freakonomics Quorum on Sex, and since I don't know when to say no, I agreed. For editorial reasons they cut most of my links, in particular links to the supporting data. I've reproduced it below with the links in tack.

How differently do Americans perceive sex now than they did 30 years ago? (For brevity's sake, it's best to discuss one or two ways.)

The best data on American’s perceptions of sex come from the General Social Survey. Assuming Americans don’t suffer from extraordinary cognitive dissonance we would also expect their perceptions of sex to change with their behavior. Sexual behavior since the introduction and legalization of the female contraceptive pill in the 1960s, has changed dramatically from what was once an act that risked pregnancy to an act which could be accomplished with a risk of pregnancy approaching zero. Importantly it was a technology controlled by woman, rather than by men as was the case of previously available condoms. The primary result of this technological change was the sexual revolution, which started a very slow cultural shift towards a general acceptance of premarital sex.

For the most part I think a majority of Americans have come to embrace sex as an intimate act primarily for the pleasure of the participants, instead of an act with the primary or even secondary purpose of creating a child. This has led to several other changes in society. No longer is premarital sex as shunned as it once was – unless your mother is the Republican VP nominee who has promoted abstinence education - because no longer is it as likely to result in pregnancy. And if sex isn’t about creating life, but solely about creating pleasure and intimacy between consenting adults, then homosexual sex - for some people – can achieve that desired end. It is one reason why homosexual relations are gradually becoming socially accepted by many Americans.

There are of course pockets of Americans - generally religious - who still view the primary function of sex as procreation, a view the Catholic Church surprisingly continues to promote forty years after the encyclical “Humanae Vitae.” Contrary to the views of many practicing Catholics sex according to the church should “be open to the creation of life”, which I interpret to mean there should be a positive risk of pregnancy unaltered by mechanical or chemical means. Actually the Church’s preferences are asymmetric in that they are only concerned with preventing the lowering of the probability of pregnancy because if they were concerned about raising it the encyclical would have also banned the consumption of alcohol, a chemical known to increase the risk of pregnancy.

How do you predict perceptions will change 30 years from now?

The one caveat to previous question might be the general decline in birth rates around the globe. Falling fertility rates have put strains on social insurance and retirement systems that rely upon the pyramid scheme of population growth. Italy has talked about subsidizing sex for procreation purposes. Who knows one day we may view sex as an act of patriotism as we may be asked to literally do IT for our country.

As in the case of the pill, new technologies are probably most likely to facilitate future shifting social perceptions of sex. I think many Americans perceive a dramatic drop off in sexual activity among the elderly, but I think innovations like Viagra will force us to rethink that stereotype. In fact there is already evidence that the little blue pill has led to a dramatic rise in STDS among older Americans. Senior living situations are likely the next battle ground against STDs. I’m not implying senior living environments have become bastions of sex, akin to college coed dorms, but none the less the technology has allowed for increase in sexual activity, and with it the transmission of disease.

I also think other social biases will change with time. The internet has been a boon for people with sexual fetishes, allowing them to connect with others who share their interests. In turn it has lead people who were previously unaware of the fetishes to learn more about them. And as with most cultural changes in perceptions, slowly over time and with more exposure to them the repulsion many people feel will diminish.

How should we as a society be looking at/treating sex? (your opinion)

I think we should view it as the loving, intimate, fun, and pleasurable connection between consenting adults. As such it should not be regulated by the state. Failing that utopian dream, the government should at least let women (and men) in Alabama buy and enjoy their sex toys.

Monday, September 08, 2008

Google gives great advice to students and sounds like they are describing BUS 230.

Our Googley advice to students: Major in learning
7/15/2008 05:48:00 PM
Management guru Peter Drucker noted that companies attracting the best knowledge workers will "secure the single biggest factor for competitive advantage." We and other forward-looking companies put a lot of effort into hiring such people. What are we looking for?

At the highest level, we are looking for non-routine problem-solving skills. We expect applicants to be able to solve routine problems as a matter of course. After all, that's what most education is concerned with. But the non-routine problems offer the opportunity to create competitive advantage, and solving those problems requires creative thought and tenacity.

Here's a real-life example, a challenge a team of our engineers once faced: designing a spell-checker for the Google search engine. The routine solution would be to run queries through a dictionary. The non-routine, creative solution is to use the query corrections and refinements that other users have made in the past to offer spelling suggestions for new queries. This approach enables us to correct all the words that aren't in the dictionary, helping many more users in the process.

How do we find these non-routine savants? There are many factors, of course, but we primarily look for ...

... analytical reasoning. Google is a data-driven, analytic company. When an issue arises or a decision needs to be made, we start with data. That means we can talk about what we know, instead of what we think we know.

... a willingness to experiment. Non-routine problems call for non-routine solutions and there is no formula for success. A well-designed experiment calls for a range of treatments, explicit control groups, and careful post-treatment analysis. Sometimes an experiment kills off a pet theory, so you need a willingness to accept the evidence even if you don't like it.

... team players. Virtually every project at Google is run by a small team. People need to work well together and perform up to the team's expectations.

... passion and leadership. This could be professional or in other life experiences: learning languages or saving forests, for example. The main thing, to paraphrase Mr. Drucker, is to be motivated by a sense of importance about what you do.

These characteristics are not just important in our business, but in every business, as well as in government, philanthropy, and academia. The challenge for the up-and-coming generation is how to acquire them. It's easy to educate for the routine, and hard to educate for the novel. Keep in mind that many required skills will change: developers today code in something called Python, but when I was in school C was all the rage. The need for reasoning, though, remains constant, so we believe in taking the most challenging courses in core disciplines: math, sciences, humanities.

And then keep on challenging yourself, because learning doesn't end with graduation. In fact, in the real world, while the answers to the odd-numbered problems are not in the back of the textbook, the tests are all open book, and your success is inexorably determined by the lessons you glean from the free market. Learning, it turns out, is a lifelong major.

Sunday, September 07, 2008

Two good posts and links on coming changes to health care funding. From Greg Mankiw on the strange bedfellows of partisan presidential policy. And Arnold Kling on the future of medicaid and health care funding.